More work ahead on digital markets for rentals in Virginia Beach

Phil Kellam, revenue commissioner in Virginia Beach, speaks with a citizen following a meeting during which he briefed the Virginia Beach City Council about issues in dealing with online rental platforms such as Airbnb. [John-Henry Doucette/The Princess Anne Independent News]

THE INDEPENDENT NEWS

COURTHOUSE — Commissioner of the Revenue Phil Kellam recommended further study of the scope of short-term rentals in Virginia Beach, a hot topic over the past year due to aspects such as “event home” rentals in Sandbridge and the growth of online marketplaces to rent homes and rooms.

There has been concern about safety, noise and parking regarding rentals which often are in residential neighborhoods.

The city last year required registration of those offering online rentals in homes to collect lodging taxes, and the city council recently brought registration requirements in line with what evolved during the recent Virginia General Assembly session.

Kellam recommended further research about those doing the renting in the city, and he said he would like further guidance on the topic, including an additional resolution that might go into effect next year. He recommended another group to look at the matter, too.

He made his recommendations with the city council during a workshop on Tuesday, June 27, while discussing a report about the lodging industry by Old Dominion University economists.

Kellam said the lodging industry in the city has seven bed and breakfast operations, six campgrounds, 114 hotels and 1,483 short-term rentals, meaning rentals offered for less than a month. The vast majority of short-term rentals identified are represented by rental agencies, however.

“The hotel market in Virginia Beach has experienced a robust recovery in hotel industry,” Kellam said, citing the report. The industry has grown its market share over the years and occupied rooms are back to levels seen before the recession, and revenue per available room rates exceeded region and state numbers in 2016.

“Considering the beating we took during the recession, this is a very good trend for the lodging industry in Virginia Beach,” Kellam said.

Online marketplaces, generally referred to as Airbnb in these discussions, had a single listing in 2011 but 392 listings in 2016.

Most home rentals in Virginia Beach are for multi-bedroom homes, according to the report, which found the city has “the highest percentage of revenue earned through listings for four bedrooms or more” compared to other cities.

Kellam said online marketplace rentals, like hotels, tend to follow the seasonal pattern.

“The long and the short of it is that we have a very robust lodging market in Virginia Beach,” he said. “We have three major sectors, the traditional hotel and rental market … and we have a new option with online home and room rentals. They’re all evolving.”

The city will have to take some path to deal with this, he said.

“We’re discovering them everywhere across the city,” Kellam said, though many are at Sandbridge and the Oceanfront.

Ed. note — The Independent News has been covering the issue of short term rentals, particularly in terms of issues in Sandbridge, since Summer 2015. An archive of the previous newspaper stories about event homes can be found by clicking on this link.